Millions of Lloyds bank customers will shortly receive a letter through the
post informing them that their banking details are about to change. We
explain how the changes will affect you.

These customers will see the banking licence behind their account transferred to Lloyds TSB Scotland, as the first part of the process of switching them to the new “TSB Bank”.

Up to 4.6m customers will be switched to this new bank after the competition authorities forced Lloyds Banking Group to sell off more than 600 branches. The Co-operative Bank is in advanced talks to run this new banking operation, with a purchase agreement expected early next year.

The following questions and answers explains in more details what these changes mean for affected customers.

Q: How many customers will be affected?

A: Around a sixth of Lloyds’ banking customers will be affected. Presently Lloyds Banking Group has around 30m customers, and 4.6m will be transferred to this new bank. However, of those set to move just over 1m are already customers of Lloyds TSB Scotland – so they won’t see any change in their banking licence, and are not being written to at present.

Q: I am a Lloyds customer. How can I check whether my account will be switched?

A: All those affected will receive a letter. But those who want to check can visit llloydstsbtransfer.com. This has a full list of all 632 Lloyds TSB and C&G Branches that will transferred to the new bank. If your branch is listed then the chances are you will be affected. However, there will be a few exceptions as insurance customers and private banking customers using these branches won’t necessarily be moved over to the new bank.

Q: Will my bank card and chequebook still work when the banking licence has changed?

A: Yes. This is a legal change and shouldn’t affect the day-to-day running of your account. You won’t need a new debit card, credit card, account number of chequebook at present.

Q: I have more than £85,000 on deposit with this bank. Do I still get full protection under the Financial Services Compensation Scheme?

A: The vast majority of people won’t be affected at all. However, a small minority who already have savings with Lloyds TSB Scotland could be affected. If your Lloyds savings are transferred and this means the total protected under the Lloyds TSB Scotland exceed £85,000 you won’t be fully protected by the FSCS. Those who fall into this group will be contacted directly by Lloyds.

Q: What if I don’t want to switch banks?

A: When the transfer is formally agreed next year, Lloyds will contact all affected customers again. Those who don’t want to switch will be informed of the procedure they need to follow to continue banking with Lloyds. The majority of customers will be automatically switched to the new bank.

Q: Will I need to redirect all my standing orders?

A: No. Customers will keep the same account numbers and sort codes, so salaries, direct debits etc should continue to be paid as normal. However, during the first three months of next year customers should be sent new debit and credit cards. These should work in exactly the same way, and have the same credit and payment limits as present.

Q: Will I get paid the same interest on my account?

A: Accounts terms and conditions should remain the same. However, over a period of time it’s likely that some accounts will be merged or replaced with new offerings and customers could see rates change. Bank argue though this is a normal process and happens at present, whether or not you have a new owner running the bank.

Q: Will it definitely be the Co-op running this new bank?

A: It looks extremely likely. Lloyds said: “The deal with the Co-operative to buy TSB is progressing well with the sale and purchase agreement expected in the first three months of 2013.” Once it is sold TSB will be the eighth largest retail bank in the UK.